What happens if a Bambu franchisee is due a credit after the January 15th reconciliation?

According to Bambu's 2025 Franchise Disclosure Document, if a franchisee has overpaid on their royalty fees, they may be due a credit after the January 15th reconciliation. Bambu does not issue a direct refund for these overpayments. Instead, the overpayment is applied as a credit toward future monthly royalty fees. This means that a franchisee who has overpaid will have their future royalty obligations reduced until the entire credit amount is used up.

This policy of applying credits to future royalties rather than issuing refunds is fairly common in franchising. It helps to simplify the accounting process for the franchisor and ensures that the franchisee remains current on their financial obligations. However, it also means that a franchisee who is planning to sell or close their Bambu shop may not be able to recoup the full value of their overpayment.

For a prospective Bambu franchisee, this policy highlights the importance of accurately tracking net revenues and royalty payments throughout the year to minimize the risk of overpayment. It also underscores the need to carefully consider the potential implications of this policy in the event of a future sale or closure of the franchise. Franchisees should maintain detailed records of all payments and reconciliations to ensure accurate application of any credits due.